global transporation market report

G L O B A L T R A N S P O R TAT I O N M A R K E T R E P O R T

O C TO B E R 2 0 2 1

AIT WORLDWIDE LOGISTICSGLOBAL TRANSPORTATION MARKET REPORT | OCTOBER 2021

GLOBAL OCEAN TRENDS

▪ More than 100 vessels are anchored and awaiting entry to the Port of

Shanghai – expect further impacts to the global supply chain.

▪ On-time performance for most carriers fell below 40% in September.

▪ Carriers continue to focus on yields and record profits, fueling

predictions that while shippers may see slight temporary relief, rates will

ultimately rise alongside capacity manipulation into 2022.

▪ Markets already ordering for the holiday season are facing numerous

final mile and supply chain constraints, which could increase port wait

times, tying up capacity at anchor.

▪ Shippers’ focus remains on near-term equipment and space availability

as conditions are expected to intensify through the beginning of 2022.

World Container Index Global Port Throughput Bunker

So

urc

e: D

rew

ry M

arin

e R

ese

arc

h


▪ Idle tonnage growth was noted in September; however, the increase was negligible. Carriers are still looking to implement

tonnage as demand remains very high.

▪ Approximately 176 ships accounting for 686,264 TEU are showing idle (2.8% of global capacity), some due to COVID-19

quarantine requirements.

▪ Nearly 90,000 TEUs launched with new vessels in September. Both MSC and Evergreen took delivery of Megamax vessels.

CAPACITY AND IDLE FLEET

Idle Fleet

Source: Drewry Marine ResearchSource: Alphaliner

Tonnage Inactive


OCEAN TRADE LANES

▪ With tonnage being redeployed consistently to the lucrative

head haul trades, second-tier trade lanes are feeling the

impact. For example, 50% of sailings were blanked on the

Far East to Middle East trade lane due to both congestion

and a lack of tonnage. Even with second-tier trade lanes

seeing record increases in rates, the head haul lanes

remain the primary target for carriers chasing record profits.

▪ Container supplies remain tight for imports to Europe and

North America from Asia-Pacific origins.

▪ U.S. ports are showing record throughput despite the highly

congested environment. To facilitate the U.S. market’s

ordering, LA and LGB have implemented extended hours in

an effort to manage backlogs.

▪ Faced with rising fuel costs and driver shortages, the United

Kingdom is calling for support in advance of the peak

season due to concerns that constricted throughput may

impact holiday orders.

Trade Lane Status Comments

TPEB to USEC Utilization 100%

TPEB to USWC Utilization 100%

CBP to N EurRate increases

expected

CBP to MED

SE Asia to N Eur

SE Asia to MED

ISC to US

N Eur to ISC Rate increases

expected


N Eur to APRate increases

expected

MED to AP

US to N Eur

US to MED

MED to USRates increases

are likely

N Eur to USRate increases

expected

US to ISC

Med to ISC Rate increases

expected

Available space; quick booking turn

time.

Capacity well utilized; some space

available.

Demand higher than supply; space

agreements challenged.


OCEANCARRIER UPDATES

▪ MSC added Portland, Oregon on the U.S. West Coast, to its “Santana” service from

China. The new call was slotted ahead of Tacoma, Washington as the first U.S. port

inbound from the Far East.

▪ CMA CGM will improve its direct connections between India, Pakistan and the U.S.

East Coast. In late October, the French carrier will join Hapag-Lloyd as a vessel

provider on the “INDAMEX 2” service.

▪ Port congestion and operational disruptions in Northern Europe and North America

have compelled Maersk and MSC to adjust the schedule of the “TA2/NEUATL2”

service. The early October fleet addition of the 7,154-TEU Santa Rosa will enable the

service to turn in six weeks while adding Charleston, South Carolina to the rotation.

▪ Sea Lead Shipping has emerged as the vessel operator of the new twice-monthly Far

East-North Europe service from EShipping Gateways, a joint venture between OOCL

Logistics and JD Logistics (part of e-Commerce retailer JD.com).

▪ A terminal catering to feeder vessels will be constructed in Busan New Port in order

to cut trucking costs from Busan’s North Port. New Port is primarily used by mainline

operators as a port of call on the Asia-Europe and transpacific routes. Construction is

to be completed by 2026 and facilitate upwards of 3.5 million TEU annually.

2M

MSC

Maersk

OOCL

CMA CGM

COSCO Shipping

Evergreen Line

Ocean Alliance THE Alliance

Hapag-Lloyd

ONE

Yang Ming

AIT WORLDWIDE LOGISTICS


MEXICO AND TRANSBORDER

Transborder Crossings

▪ Tijuana and Mexicali – No impacts. Current crossing times are SB one hour and

NB two hours.

▪ Juarez – No impacts. Current crossing times are SB one hour and NB two hours.

▪ Laredo – No impacts. Current crossing times are SB one hour and NB two hours.

Need 48 to 72 hours for transfers along the border.

View up-to-the-minute border wait times: https://bwt.cbp.gov/details/06240201/COV


Over the Road/FTL

▪ Capacity from Mexico to the United States remains extremely strained.

▪ AIT recommends advance booking of one week, if possible.

▪ Exiting Mexico, direct trailers are at a premium, with the average cost holding at

more than $5,500.

https://bwt.cbp.gov/details/06240201/COV


Ocean market remains impacted for importers

▪ Capacity and equipment shortages remain challenging for Mexico consignees.

▪ Turn times for vessels at the ports of Ensenada and Manzanillo are stable.

▪ Inland capacity continues to have the greatest impact for container delivery

times, with capacity strained for both rail and trucking.

MEXICO AND TRANSBORDER


Air and Ocean Updates

Air capacity

▪ Sufficient capacity for exports to Europe, the United States and Asia.

▪ The Mexico-Brazil lane is the most congested due to high demand.

▪ Increasing air freight demand at the border.

▪ Mexican airports are helping to ease U.S. West Coast port congestion.


AIR FREIGHT OVERVIEW

▪ Demand remains strong.

▪ Global cargo capacity is still constrained

due to the lack of belly space on

international passenger flights. This

translates into elevated load factors.

▪ Capacity is expected to increase in

November when the U.S. eases

restrictions for international visitors.

▪ With the boost to capacity, revenues are

also expected to increase for airlines.

▪ Air carriers continue to see trade growth

as demand outweighs supply. With

ocean carriers continuing to command

record high rates, air has become a

viable option for more shippers.

Air Cargo Growth v. Global Goods Trade

Sourc

e:

IAT

A A

ir C

arg

o M

ark

et

Analy

sis

GLOBAL TRANSPORTATION MARKET REPORT | OCTOBER 2021


CAPACITY DEVELOPMENT

Sourc

e:

Seabury

Inte

l

International Air Cargo Capacity Growth 2021 vs. 2019▪ Air capacity recovery has reduced its deficit to

less than 10% below 2019 levels.

▪ Capacity is expected to be gradually added to the

market in November; however, we expect rates

will continue to rise.

▪ Recovery is being hindered by COVID-19

containment measures in China (mainly

Shanghai, where capacity reduction is down 19%

from the first week of September). This is likely to

increase further as cargo is relocated.

▪ Carriers remain focused on prioritizing higher

yielding cargo opportunities and premium rates to

facilitate loading.


AIR TRADE LANES


AP to US Utilization 98%

US to AP Utilization 98%

Europe to APStrained capacity

ex U.K.

AP to Europe Utilization 98%

Europe to US

Destination ATL has

slightly more

capacity

US to EuropeUtilization 98%


US to LATAM Utilization 95%

LATAM to US Utilization 90%

Europe to

LATAM

Congestions from

DE and U.K.

LATAM to

EuropeUtilization 90%

India to US Utilization 100%

US to India Utilization 100%

Available space; quick booking turn

time.

Capacity well utilized; some space

available

Demand higher than supply; space

agreements challenged.

▪ Reduction of global capacity and increased rates out

of Asia in recent weeks are largely due to China’s

restrictions to curb the spread of the delta variant,

compounded by peak season.

▪ Some October and November charter prices from Asia

to the United States reached more than $2.5 million.

▪ Vietnam air freight traffic is strongly increasing after

the end of quarantine measures, with a growing

backlog. This is expected to impact the whole of Asia,

and shippers are already trucking to Hong Kong to find

space.

▪ Retail clients are buying charters in bulk ahead of

holiday demand.

▪ Congestion at U.S. destinations remains a challenge

with shortages of workers who break down cargo.


AIRLINE UPDATES


CURRENT STATE

▪ COVID-19 outbreaks in Asia continue to impact the air market due to pressure on

ground-handling efficiencies. Expect rates to remain at high levels through the end of

the year.

▪ The Australia and U.S. governments have announced intentions to ease travel

restrictions. This will support stabilization of certain lanes, though major head haul

trade lanes are expected to remain volatile with capacity challenges.

▪ Charters are still a primary source of lift from the Asia-Pacific region. However,

backlogs are growing and expected to intensify due to China lockdowns and

pressure from ocean shippers seeking urgent air capacity.

▪ Due to shipments to China being suspended as a result of the pandemic, some

European and North American exporters are facing issues with cargo being left

behind.

FUTURE STATE

▪ The European air market is projected to remain free-sales driven with frequent

fluctuations.

▪ Additional rate hikes are anticipated in Q4 due to seasonal pressures.

▪ High volumes and a shortage of supply chain components in North America and

Europe are expected to generate a highly intense peak season.

▪ In Asia, expect additional congestion leading to new price increases ahead of the

holiday season.

AIT WORLDWIDE LOGISTICSGLOBAL TRANSPORTATION MARKET REPORT | OCTOBER 2021 AIT WORLDWIDE LOGISTICS

DirectionCapacity

Development

Rate

Trend

Equipment

Availability

Europe to China

China to Europe

▪ If route and corridor are flexible,

regular space can be acquired for

Westbound traffic.

▪ Westbound rates are expected to

hold near September levels with

slight increases possible.

▪ Eastbound service to Suzhou has

weekly departures and can

accommodate freight at favorable

rates.

SILK ROAD


NORTH AMERICAN TRANSPORTATION

▪ Truck rates are rising sharply as demand tightens into the fourth quarter amid shrinking capacity.

▪ As of Sept. 1, peak season surcharges are in effect for all major ground carriers through the end of the year.

▪ AIT’s air/ground hybrid service provides a third-day shipping alternative.


NORTH AMERICAN TRANSPORTATION


▪ The load-to-truck ratio is

exclusively calculated by the dry van full

truck load availability and varies by

state.

▪ Truck capacity is tightening

as projected; this trend will continue

through the fourth quarter.

▪ West Coast truck capacity is challenged

due to ocean transload congestion, with

ships anchored and awaiting availability.

▪ AIT’s truck network adds

controlled capacity in response to rising

costs and limited space with carriers.

AIT WORLDWIDE LOGISTICSGLOBAL TRANSPORTATION MARKET REPORT | OCTOBER 2021 AIT WORLDWIDE LOGISTICS

For more information on U.S. import-related questions please contact

[email protected].

According to China’s General Administration of Customs, random inspections

will now take place on 20 categories of import and export commodities.

Imported goods

▪ Dishwashers, air purifiers, electronic toilets, food waste disposal systems,

induction cookers, printers, stationery, simulation accessories, interior car parts,

clothing, helmets, child safety seats, paper or cardboard plates, saucers, ports,

cups and similar products.

Exported goods

▪ Holiday string lights, LED lighting sources, children’s bicycles, children’s

scooters, electric strollers, toys, plastic food contact products, etc.

Learn more

CUSTOMS BROKERAGE

mailto:[email protected]

https://today.thefinancialexpress.com.bd/public/last-page/china-looks-to-random-check-1632506015


ECONOMIC INDICATORS

▪ The September U.S. ISM

Manufacturing Index measured 59.90,

up slightly from 59.50 in August and

from 56.00 one year ago.

▪ Retailers face uncertainty over the

scale of online orders versus in-store

sales due to the delta variant.

▪ The third quarter shows a decline in

consumer confidence and spending

as product bottlenecks impact growth.

▪ While analysts project a large decline

in the GDP growth rate in 2022, an

increase of capacity across all modes

isn’t expected until well into the

second quarter.

GLOBAL TRANSPORTATION MARKET REPORT | OCTOBER 2021


TURN INSIGHTS INTO ACTION WITH AIT

North American Domestic Product

Dale Grosso

[email protected]

Customs Brokerage

Emily Faulkner

[email protected]

International Air and Ocean

Kent Thompson

[email protected]

Partner with a global network of experts on logistics

plans tailored to you

Now that you know what’s on the horizon for the coming

month, it’s time to strategize. But you don’t have to do it alone.

Let us put our 40+ years of experience across every industry,

mode and region to work for your organization.




global transporation market report

Documents